Developers want the National Statistics Office to conduct a scientific study on vacant properties to classify them and see which ones are actually habitable.
The chairman of the Malta Developers’ Association, Michael Falzon, said the national census carried out last year would determine how many properties were vacant – but simply having this number was not enough.
The results of the census have not yet been published but estimates put the number of vacant properties at 70,000.
However, Mr Falzon believes many of these properties are not habitable so a scientific study would classify them into those that can be used and those that cannot.
Moreover, he said many vacant properties were not of interest to those looking to buy. Some were too small or had interconnecting rooms, for example.
Mr Falzon was addressing a news conference in which he outlined the association’s wish-list for the upcoming Budget.
One of its main proposals is for the Government to make amendments to the law on the final withholding tax on property sales through a legal notice rather than waiting to include them in the Budget which, in the current political scenario, may not go through.
The MDA is proposing that an option for sellers to pay 35 per cent tax on the profit of a property sale, rather than 12 per cent on the value of the property, should be extended to also cover properties sold seven years after their last transfer.
Mr Falzon said both the Government and the Opposition had voiced agreement with this proposal.
Finance Minister Tonio Fenech had told the association that he would consider it for the Budget, but in view of its importance and the fact that the Budget might not be approved, the MDA felt the change should be made by legal notice.
“We feel we should pay tax on the profit we are making, not on the price we are selling it for. People pay tax on what they make. This matter is urgent,” he said.
Mr Falzon said this “very restrictive measure” had been introduced at a time when property prices were booming.
Now that the market was practically at a standstill, the tax was restricting sellers from parting with their property at less profit, he said.
In other proposals, the association is asking for a one-year concession for first-time buyers to be exempt from paying the 3.5 per cent stamp duty and a measure for the interest paid on house loans to be deducted from income tax as an expense.
Developers also want the Government to reward them if they issue loans themselves for the purchase of their property with a provision to pay 15 per cent tax on the interest and reduce it for income tax purposes.
Mr Falzon said developers were concerned about the depreciating value of property, which was causing people to stop viewing property as an investment.
The MDA is also proposing that foreigners who bought property in Malta should be granted permits to rent it out as this would boost the rental market.
The developers are also calling on the planning authority to reduce certain tariffs such as those for the rehabilitation of an existing property which is in a deteriorated state.